GRI 103-2

We systematically manage the risks associated with our activities. In the Enea Group the corporate risk management (ERM) concept is in place, based on a coordinated model.

The Group Enea manages corporate risk in such a way as to minimize the potential effects of a given risk. In the adopted model, through the use of organizational units dedicated for this purpose, Enea coordinates the corporate risk management process. The implementation of the adopted assumptions is possible thanks to the structure under which the Enea Risk Management Department is located, which consists of two offices responsible for financial risk management and business risk management, as well as business continuity and insurance. At the same time, the Group companies have the units in their structures that are responsible for the risk management area that cooperate with the Risk Management Department Enea. The companies have an organizational division into the Front Office, Middle Office and Back Office.

As part of the risk map in the Enea Group, the following non-financial risks have been identified that may have a significant negative impact on social, Employee, environmental, anti-corruption and bribery issues or human rights issues:

The efficiency of the enterprise risk management process is ensured by:
  • a system of business continuity management which aims at the identification of processes critical to the business activity of the companies belonging to ENEA Group and the implementation of such mechanisms and procedures which will ensure their continuity in an emergency situation,
  • identification of non-financial risks at the level of individual companies belonging to ENEA Group, resulting from the specific nature of business activity exercised,
  • division of the process into specific segments for which documentation has been prepared in the form of policies, procedures and methodologies,
  • division of the process into stages covering the identification and assessment of new risks, monitoring of existing risks and their reporting,
  • operational management of risk by the companies belonging to ENEA Group within the limits granted and in accordance with principles approved by the ENEA Group Risk Committee.

DOCUMENTS REGULATING RISK MANAGEMENT

Policies, Procedures and Methodologies regulating the issues of risk management in the Enea Group:

  • Enterprise Risk Management Policy of Enea Group (ERM Policy)
  • Enterprise Risk Management Methodology of Enea Group
  • Liquidity Management and Liquidity Risk Management Policy of Enea Group;
  • Liquidity Management and Liquidity Risk Management Procedure of Enea Group;
  • Foreign Exchange Risk Management and Interest Rate Risk Management Policy of Enea Group;
  • Foreign Exchange Risk Management and Interest Rate Risk Management Procedure of Enea Group;
  • Credit Risk Management Policy of Enea Group;
  • Credit Risk Management Procedure of Enea Group.
  • Commodity Risk Management Policy of Enea Group;
  • Commodity Risk Management Procedure of Enea Group;
  • Business Continuity Management Policy of Enea Group;
  • Business Continuity Management Methodology of Enea Group;
  • Insurance Policy of Enea Group;
  • The Policy of Enea Group for ensuring integrity and transparency in the electricity and natural gas wholesale market;
  • The Policy of Enea Group for Preventing Abuse in Financial Instruments Markets in the Area of Commodity Derivatives, Greenhouse Gas Emission Allowances and Bundled Products.

MAP OF NON-FINANCIAL RISKS

As part of the risk map in the Enea Group, the following non-financial risks have been identified that may have a significant negative impact on social, Employee, environmental, anti-corruption and bribery issues or human rights issues:

ENVIRONMENT AREA
BHP AREA
AREA OF EMPLOYEES
SOCIAL AREA
The area of human
ENVIRONMENT AREA

AREA COMPANY NAME NON FINANCIAL RISK RISK MANAGEMENT
GENERATION Enea Wytwarzanie
  1. Risk of negative impact on the environment by emissions of nitrogen oxides and dust to the air.
  2. Risk of impact on natural resources near the location of the Kozienice Power Plant.
  3. The risk of incorrect and untimely reporting of the National Centre for Emotional Balancing and Management (KOBiZE), resulting in the calculation of administrative penalties for untimely settlement of the volume of emissions.
  4. The risk of interrupting the morphological continuity of rivers on which hydroelectric plants and damming stages are located.
  5. The risk of impact on wind chiropterofauna and avifauna, which may result in the increased mortality of a given population.
  1. In 2018, the company finalized investments that will reduce the emissions of nitrogen oxides and dust to the air by building a catalytic flue gas denitrification plant (SCR) on the 500 MW block No. 10 and electro filter modernization of the 200 MW block No. 6.
  2. The company continues the constant supervision introduced in 2016 on the area of the Kozienice Power Plant and in its immediate vicinity, and conducts the protection of species, under which, among other things, it conducts permanent environmental supervision during the works of modernization of the Power Plant track at the smooth snake's sites.
  3. The risk is minimized by effective supervision over the implementation of the “CO2 emission monitoring plan", which is an integral part of the currently binding decision of the Mazovian Marshal Office, enabling the emission of greenhouse gases. Verification of the annual report on emissions takes place in two stages: pre-verification and final report.
  4. The company has developed variant analyses regarding the use of the most favourable solutions on a given hydropower plant in order to maintain the morphological continuity of the rivers. In addition, the company cooperates with state entities in order to build fish passages in places where it is necessary, e.g. fish passages on the Rega river (completed investments) and a pier on the Drawa river (investment under construction).
  5. The company commissions and supervises the monitoring of the impact of its wind farms on the chiropterofauna and avifauna population. At present, there was no increase in mortality in any of these populations.
GENERATION Enea Elektrownia Połaniec
  1. Risk of adverse impact of the Połaniec Power Plant on the natural environment through the functioning of the plant, emissions of nitrogen oxides and dust into the air.
  1. The company minimizes the identified risk by carrying out infrastructural investments and modernization works. In 2018, the company completed the modernization of sewage treatment plants, IOS and installation on unit no. 4 of the catalyst SCR, resulting in the reduction of nitrogen oxide emissions from about 500 mg / Nm³ to below 200 mg / Nm³. The company also modernized the electrostatic precipitators of units 2-7, thus limiting dust emissions.
GENERATION Enea Ciepło -Białystok Heat and Power Plant
  1. Risk related to environmental aspects being elements of activities or products having a significant impact on the environment in the following areas: groundwater abstraction, furnace waste disposal, generation and discharge of rainwater - industrial and rainwater to surface water, and dropping of rainwater to ground, SO2 emissions, NO2, dust.
  2. The risk of occurrence of emergency situations affecting the natural environment, concerning, among others: the leakage of chemical compounds from storage tanks, oil from transformers and turbine sets; fire of power equipment, coal and wood dust; damage to the container with a radioactive source; pollution of social and living water.
  1. Based on the adopted key characteristics and specific operational criteria, the Company constantly monitors identified significant environmental aspects.
  2. In the area of identified potential emergency situations, the methods of reacting to the existing situation, preventive actions preventing the occurrence of failures and actions aimed at preparing for the response in the event of a breakdown were defined. An Emergency Rescue Group operates in the company, which is a dedicated unit to participate in the conditions of failure.
GENERATION Enea Ciepło
  1. Environmental risks related to pollutant emissions: NOx, dust, SO2, CO2, CO, HCl, HF (identified in the procedure PŚ-4.3-01 "Identification of environmental aspects").
  1. The company has a continuous emissions monitoring system including two independent heat emitters from the "West" Heating Plant, which provide control of the level of emissions emitted in a continuous system. The Company, in order to counteract the materialization of the pollutant emission risk, applies to the I-OŚ-15 instruction "Analysis of CO2 emission monitoring risk2", which identifies and determines the probability of risk occurrence and the effects of risks. The matrix and the risk table have been defined in the instructions. Additionally, the control of individual stages of operations, starting from determining the amount of fuel consumed, through monitoring the combustion process, monitoring data collection and processing, and ending with the calculation of the total emissions, affects the reduction of individual environmental risks. The company also implements investments that limit the negative effects of the impact on the environment. An example of this type of investment is a change in the way of heating in the "West" Heat Plant, the aim of which is to convert a coal-fired boiler to natural gas. In 2019, the investment will significantly reduce dust and gas pollution.

BHP AREA

AREA COMPANY NAME NON-FINANCIAL RISK RISK MANAGEMENT
DISTRIBUTION Enea Operator
  1. The risk associated with the threat of an accident at work.
  1. In order to eliminate the potential threat, the company's Health and Safety campaign "Our choice - safe work" is conducted. As part of the campaign, educational meetings are held in the field of safe work while operating the chainsaw and the methods and rules for evacuating the victims from heights. In addition, the company conducts awareness raising activities in the area of potential threat situations through the dissemination of educational materials, which include information posters, voltage indicators, health and safety gadgets. The company has an electronic newsletter promoting safety and hygiene of working conditions. In addition, the company conducts occupational risk assessments in accordance with the approved methodology of the Polish Society for Transmission and Distribution of Electricity "Occupational risk in electricity distribution companies".
GENERATION Enea Elektrownia Połaniec
  1. The risk of Contractors performing work in contravention of health and safety regulations at the Połaniec Power Plant.
  2. The risk of having only theoretical knowledge about extinguishing fires and using fire extinguishers.
  1. In order to familiarize the Employees of individual contractors with internal health and safety requirements, a document was prepared entitled "Basic requirements for Contractors performing works for the Power Plant, rules for appointing coordinators, their duties and authorizations and obligations of the Power Plant Employees when commissioning works for Contractors". The document specifies, among other things, that: all people prior to commencing work on the site of the Power Plant are obliged to:
    • conduct an occupational safety training organized by the representatives of the Power Station and undergo an examination to check knowledge of this training;
    • familiarize yourself with the health and safety regulations and rules at the site of the Power Plant 2. In order to acquire new and necessary skills in saving life, or putting out a fire and evacuating, the number of practical exercises was increased. Periodical training programs include exercises using handheld fire extinguishing equipment, including: extinguishing fire extinguishers with water fogging "burning bath", propane gas burning, extinguishing with dry powder extinguishers and CO2: biomass, woodchip, use of an internal hydrant. In addition, classes were provided to provide first aid on the issue of the AED and the use of rescue equipment of the Power Plant.
GENERATION Enea Ciepło Serwis
  1. Risks arising from work related to the removal of insulation asbestos - cement of the heating network. The risk of occupational diseases.
  1. In the company carried out periodical training of occupational health and safety and fire protection for physical Employees and people managing Employees who are exposed, or may be exposed to asbestos dust in connection with the work they perform, and also measures harmful, burdensome and dangerous factors in positions such as: welder, access coordinator and chips, inspector of biomass devices, master of biomass, heavy equipment operator, driver, Employee removing asbestos - cement insulation, fitter of heating equipment and installations.
GENERATION Enea Ciepło
  1. Risks related to the performance of duties on parts of machinery and equipment that constitute the equipment of the machinery park and were purchased before January 1, 2003 and the risks associated with work performed at heights. The risk of occupational diseases.
  1. In order to counteract the occurrence of identified risks in the company, the process of supervision over the work environment and safe working instructions at individual positions were implemented. In addition, the company conducts activities that allow the adaptation of machines that are part of the company's equipment to the minimum requirements for occupational health and safety in the use of machines by Employees during work.
SUPPORT Enea Centrum
  1. The risk of a traffic accident and the risk of fire.
  1. The basis for determining and estimating the occupational risk in the company is the occupational risk card developed for the workplace. Due to the identified risks, the company conducts activities and actions in the form of trial evacuation drills, trainings in safe driving, first aid trainings for company Employees and systematic inspections of workstations and rooms.

AREA OF EMPLOYEES

AREA COMPANY NAME NON-FINANCIAL RISK RISK MANAGEMENT
GENERATION Enea Elektrownia Połaniec
  1. The risk of not providing the optimal level of competence for maintaining the proper implementation of the company's tasks in 2018-2020 (during the generational change).
  1. The main methods of risk management are related to: determination of staffing needs in the company, analysis of Employee retirement rights, constant monitoring of staff turnover, planning and effective implementation of recruitment processes, implementation of training, including training at the workplace, drawing up multi-annual employment plans.
DISTRIBUTION Enea Operator
  1. Risk resulting from difficulties in acquiring competent Employees, resulting from low interest in the profession of an electrical technician (generation gap risk).
  1. The company manages the risk by establishing cooperation with vocational schools as part of the Group's patronage project Enea and undertakes attempts to adapt the curriculum of the afore-mentioned schools to their needs. At the same time, the company actively participates in Job Fairs and conducts activities aimed at promoting the company as a potential employer. To this end, it organizes apprenticeships and placements as part of the "Install yourself in Enea" program. In 2018, the company signed nine contracts with industrial schools in its area of operations. The scope of the contracts provides for the financing of didactic Laboratories, assistance in organizing trips, competitions, scholarships for the most talented people, assistance in acquiring specialist vocational qualifications. In addition, the company participates in the Dual Training project, which enables the acquisition of professional experience, professional knowledge and practical skills under the supervision of specialists from the Group already during the studies. Enea Operator has also signed a tri-partite agreement with the University of Zielona Góra and the Centre for Vocational and Continuous Education "Elektryk" in Nowa Sól for the creation of a pilot class under its own patronage, to promote the classes with a teaching profile in the profession of an electrician and future acquisition of Employees among school graduates .
SUPPORT Enea Serwis
  1. Risk of generation gap.
  1. Activities in the aspect of a generation gap in 2018 include: signing eight agreements with patron schools in Szczecin, Poznań, Gorzów Wielkopolski, Bydgoszcz, Leszno, Nowa Sól, Sulęcin and Gniezno, and signing a contract for student internships within the framework of dual (practical) studies.

SOCIAL AREA

AREA COMPANY NAME NON-FINANCIAL RISK RISK MANAGEMENT
DISTRIBUTION Enea Operator
  1. Risk of protests by various social groups related to the implementation of investment tasks (especially linear investments) Enea Operator - so-called NIMBY effect ("not in my backyard"). Establishment of protest committees, groups of people, self-proclaimed "plenipotentiaries" and others sabotaging construction processes.
  1. The document "Standards for building and implementing communication and PR strategies for key network investments of Enea Operator" was adopted, which contains internal communication standards both between the organizational units of Enea Operator and between the investor and contractors. The document also contains external communication standards, understood as the inclusion of the external Stakeholders in the communication process, including local communities and local governments.
TRADING Enea
  1. Risk of undermining relationships with key Stakeholders of the company, including Clients, as a result of improper communication and dialogue.
  1. In order to counteract the risk materialization, the company:
    • develops multi-channel communication with the external environment,
    • implements the corporate social responsibility strategy and the "good neighbour" policy by running proprietary projects and involvement in social projects and programs implemented by public entities,
    • constantly monitors the situation and events that may result in outbreak of social unrest,
    • conducts systematic Customer satisfaction surveys.

The area of human

AREA COMPANY NAME NON-FINANCIAL RISK RISK MANAGEMENT
TRADING Enea
  1. Risk of occurrence of mobbing, discrimination or other unacceptable behaviour.
  1. The company counteracts the materialization of risk through appropriate education and information for Employees, organizing training for managers and other Employees, and publishing a series of articles devoted to mobbing, discrimination and other unacceptable behaviour. The company has implemented "Anti-mobbing and discrimination policy and other unacceptable behaviour at Enea SA". A satisfaction survey is also planned, including questions about unacceptable behaviour.